Salesforce Faces a Critical Earnings Test

The coming week represents a pivotal moment for Salesforce, the global leader in customer relationship management software. On December 3, 2025, the company is scheduled to release its financial results for the third quarter of fiscal year 2026, arriving at a time of heightened scrutiny. The equity has declined approximately 29% since the start of the year, trading near its 52-week low. This places significant pressure on Chief Executive Marc Benioff to demonstrate that the firm's aggressive artificial intelligence push is translating into tangible business growth, moving beyond marketing claims.

Market analysts hold mixed opinions ahead of the report. The consensus estimate calls for quarterly revenue of $10.28 billion, which would represent an 8.8% year-over-year increase. Adjusted earnings per share are projected to come in at $2.86. However, price targets from research firms show a wide dispersion, reflecting uncertainty:

• KeyBanc maintains an Overweight rating with a $400 target.
• Mizuho Securities has an Outperform rating and a $340 price objective.
• Oppenheimer reduced its target from $315 to $300, while keeping an Outperform recommendation.
• Citigroup downgraded its target from $276 to $253, accompanied by a Neutral stance.

The average price target among analysts sits at $328, notably above the current trading level near $233. The activist investor Starboard Value increased its stake by 50% in August, signaling that strategic pressure could intensify if the share price weakness persists.

Bullish Case Hinges on AI Execution

Despite the stock's performance, some institutions remain bullish. Citizens Bank, for instance, has reiterated a Market Outperform rating with a $430 price target. This implies a potential upside of roughly 84% from current levels. The bank's optimism is rooted in expectations for AI-driven growth and robust operational execution.

Recent financial metrics provide some foundation for this view. In the second quarter, Salesforce's Data 360 and AI-related annual recurring revenue (ARR) surged 120% to $1.2 billion. Its Agentic AI ARR exploded by 400%, reaching $440 million. The company's gross margin remains exceptionally strong at 77.65%, and it has generated $12.5 billion in free cash flow over the trailing twelve months.

Should investors sell immediately? Or is it worth buying Salesforce?

Furthermore, Salesforce completed its strategic $8.3 billion acquisition of Informatica ahead of schedule; the initial timeline had projected a closure in early 2027. This move significantly bolsters the company's data management capabilities.

The Core Challenge: Agentforce Adoption

The central element of Salesforce's AI strategy is its Agentforce platform. The company reports it has secured over 6,000 paid deals for the service, and the platform handles more than 1.4 million requests monthly on its own help portal. The ultimate success of this initiative, however, is not yet assured. Its consumption-based pricing model presents both an opportunity and a risk: revenue will only materialize in line with forecasts if user adoption accelerates rapidly.

The competitive landscape adds another layer of complexity. Rival ServiceNow recently reported subscription revenue of $3.3 billion, growing at 21.5%. Meanwhile, NVIDIA's latest quarterly revenue surpassed $57 billion. Salesforce's upcoming report must convince the market that it can effectively compete with these technology titans in the AI arena.

Looking further ahead, management has set an ambitious long-term goal of reaching $60 billion in annual revenue by 2030, compared to its current run-rate of approximately $39.5 billion. Whether Tuesday's earnings release builds credible momentum toward that target or amplifies existing doubts will likely determine the stock's next major directional move.